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					     Situation and Evolution
   in Europe and in the World


           John SCOWCROFT
Head of Environment and Sustainable Development
                EURELECTRIC


             MEDELEC Workshop
           Casablanca, 20 March 2008
Climate Change Update
     Beyond Bali
               Background (1)

• Most significant COP since Kyoto (1997)
  – Effort to create a new, comprehensive post 2012
    framework
  – Largest ever attendance ~15,000 delegates

• Significant pressure for an outcome
  – IPCC Fourth Assessment Report heightens concerns
  – EU, NGO pressure for action, especially by US
  – US-led Major Economies Process to build an
    alternative to Kyoto with participation by Developing
    Countries
  – Following Australian election, Rudd govt. ratifies
    Kyoto
            Background (2)
• Ongoing
  – Developing Countries resistance to emissions
    commitments
  – US rejection of Kyoto Protocol

• Expectation to develop a Bali Roadmap on
  Process to
  – Launch a new negotiation for post-2012 period
  – Outline major elements
  – Complete agreement in 2009 at COP 15
    (Copenhagen)
                       Key Issues

• Future Developed Countries commitments under
  Kyoto Protocol (§3.9)
• Review of progress under Kyoto Protocol (§9)
   – Developing Countries: focus on Annex 1 Implementation
   – Developed Countries: focus on adequacy of global effort

• Development of process for Long-term Cooperative
  Action under UN FCCC by all Parties:
  Building blocks
       Mitigation      Adaptation
       Technology      Finance
  Intense, Divisive Negotiation (1)

• Major stumbling points
   – Developed Countries emissions reductions
   – Participation of developing countries
   – Role of US

• Emissions reductions
   – EU strong desire to embed indicative range (25-40% below
     1990 levels by 2020) within the mandate
   – US (with Russia, Japan, Australia) rather than numbers:
     “recognising that deep cuts in global emissions will be
     required”
  Intense, Divisive Negotiation (2)

• Developing Country commitments:
  consideration of “nationally appropriate
 mitigation actions by developing country
 Parties..., in a measurable, reportable and
 verifiable manner”
• Noteworthy statements
  – EU threat to boycott US MEP meetings
  – Yvo de Boer (Executive Secretary) and Al
    Gore publicly note that a new US delegation
    will take charge in 2009
The Bali Roadmap: Two Tracks through 2009

 • Track 1 Kyoto Mandate: Ad Hoc Working Group on
   §3.9 (since 2005)
    – Future Annex 1 Commitments
    – 2nd Kyoto Period, post 2012

 • Track 2 UN FCCC: Ad Hoc Working Group on Long-
   term Cooperation
    – Long-term goal (vision on global emissions
      reductions to stabilize GHG concentration)
    – Building blocks:
            Mitigation   Adaptation
            Technology   Finance
             Ways Forward

• Negotiation to start March-April 2008
  – Establish work plans
  – Consider means to elicit input from Parties
    and others: business, research, civil society

• Parallel efforts
  – US-led Major Economies process aiming for
    major report out in June-July, 4-5 meetings
    1st half 2008
  – G8 process
EU Commission Climate Package
              Commission Proposals
• An EU Decision on Burden Sharing the EU greenhouse
  gas target to 2020 (-20%; -30%)
• An EU Directive on Burden Sharing the EU renewable
  energy target to 2020 (20%) including 10% biofuels
  objective
• A revised EU Directive on emissions trading from 2013
• A Directive on the framework for Carbon Storage
• A Commission Decision revising the Code on
  Environmental State Aid
• A proposal on a new structure for the development and
  demonstration of sustainable coal technologies
   Legislative processes essentially must be complete by April 2009 –
   otherwise all proposals fall once Parliament is dissolved for June 2009 elections
   (Re-introduction would delay approval to 2011/12 creating major uncertainties)
         GHG Burden Sharing - Main details

• Decision of European Parliament and Council
• Key elements
   – 2005 is base year
   – Emissions covered by the Emissions Trading Directive are excluded
       • BSA covers ~58% of total EU GHGs
   – Main assessment criteria is the relative GDP of MS
   – Equity consideration
       • Max. imposed reduction effort      = - 20% of 2005 emissions
       • Max. allowed increase              = +20% of 2005 emissions
   – Annual limit to apply with 2% banking or borrowing allowance
       • Derived as linear reduction from 2013 (≤ avg. 2008-10) to 2020
   – Restricted allowed use of external credits by Government
       • 3% of relevant 2005 emissions
       • Unused credit allowances can be swapped
   – Adjustment if new UN agreement delivered
     Main details – RES target (1)
• New EU Directive on RES
• Key elements
  – (New) Definition of term ”Final consumption of energy”
      • Ambiguous and could result in more stringent target
  – National 2020 target determined
     • Current contribution (%) + 5.8% (50% of current EU gap) + %
       based on relative GDP
     • 10% RES in transport biofuel
  – Biennial national indicative targets established from 2011-12
  – Provision for Renewable Obligation
  – (Tradable) Guarantee of Origin (GOO) from renewable sources
     •   System to label all RES (>5 MWth) on request
     •   Mutual recognition between MS
     •   May be used for compliance purposes under a RO
     •   [Surplus] May be transferred out of MS once national target met
           – Subject to prior authorisation
       Main details – RES target (2)
    – Grid to facilitate further development of RES electricity
    – Priority access to grid and priority dispatch for RES
         • Subject to grid security
    – May require TSO/DSO to carry grid connection and
      reinforcement costs (full or part)
    – Connection costs must discount any cost-benefits
      arising from a connection and connections must be
      open to tender
    – National action plans required (March 2010)
         • Updated if indicative interim targets not met
    – Biofuel sustainability criteria defined (with MRV)
    – Mandatory RES in new/refurbished buildings
    – Force majeure provision

All subject to change; main concern of MSs is to protect national support systems
          Main details - EU ETS (1)
• Fundamental revision of existing Directive
• Key elements:
   – Centrally defined annual cap
      • [-21% of 2005 emissions (~1720 Mt CO2e) in 2020]
• Adjusted down if -30% adopted
      • Annual reduction rate (1.74%) defined, continues post 2020
          – Adjusted when -30% target becomes operational
          – Review of rate by 2025
   – 100% auctioning of allowances
      • From [2013] for electricity sector and CCS
      • From [2020] for all other sectors, with progressive increase from
        2013
      • 90% of cap allotted to MS pro-rata to 2005 share of EU emissions
      • 10% residual allotted to 19 least developed MS (including IT, SE,
        LU!)
          – Individual amounts to be determined
      • Commission to prepare a Regulation governing auctioning
      • Exclusion of nominated sectors exposed to global competition
         Main details - EU ETS (2)
– Free allocation to be based on EU-wide benchmarks / rules
    • 5% of EU cap to be set aside for new entrants
– Use of CER/ERU credits prohibited for -20% target
    • Use of unutilised CER/ERU quota from 2008-12 period permitted
– Use of CER/ERU credits permitted for -30% target
    • Allowed use = 50% of difference between -20% and -30% target
– Treatment of on-site electricity production
– Provision to create allowances from domestic off-sets
– Provision to link scheme to non-national schemes (e.g.
  California)
– Possible special provision for energy intensive industries
– New sectors (and gases) included



All subject to change; however principle of auctioning already established

				
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